Crude oil futures rose from a low of $60.10 yesterday to a high of $63.21 today on expectations that the OPEC might slash output to stem price falls outweighed the impact of rising US gasoline inventories. Gold and silver are being driven by a combination of crude oil prices and technical factors. As far as the Opec is concerned, the tigers have tasted the blood of higher crude oil prices and will do everything to ensure that prices do not fall below $60.
Central bank sales are over and the supplies will soon get absorbed in the market. There could be supply pressures if gold demand continues to rise at the current pace. Gold and silver have breached some of the key technical resistances and need to hold on to the current levels for further gains. There is still some skepticism over the current rise among the retail investors and they are waiting for further signals that the current rally is sustainable.
Position squaring and rebuilding is evident by large number of fund managers as well as investors as the quarter comes to an end. The market movement is such that at every major rise short positions are getting created by day traders and once the highs are breached, new long positions are being created. If this continues for a few weeks, we could see $660 soon. However it all boils down to crude oil prices for gold and silver for the rest of the week.
GOLD -- DECEMBER FUTURE
Gold needs to break $614.40 for $621 and $628. On the lower side the earlier resistance of $599.0 is now the support with $586.0 as the key short term support.
SILVER -- DECEMBER FUTURE
Silver targets $1220 and $1320. On the lower side $1152 is the initial support with $1137 as the key weekly support level.
Happy Profitable Trading
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